AMA - Retired at 40

[Amaretire40]

As the title says, I’ve decided to retire at 40, so AMA!

Congrats OP, sounds like you’ve worked hard in a lucrative career.

Interested to know more of your thoughts on not investing in property- not least for an asset spread and safeguard against the stock market, are you bringing your professional experience to bear or is it more your working class background (homes are not investments) that’s shaping your views?

With all your free time you could offer mumsnetters some beginners guides to investing - women tend to be more cautious and hence lose out I believe?

It’s entirely the fact I struggle with the thought of homes being investments - though given the plan to downsize this maybe that’s a bit hypocritical now…

It’s not a fantasy for people who sell 20 years of their lives to the utter hell of global finance. Imagine knowing you spent years investing in arms and promoting global inequality?

This is not a criticism of the OP per se, some people CAN do this work - and it does make the whole world more prosperous. (At the expense of a more equal society) But it’s a hideous environment to have spent 2 decades of your limited life in and that is why the salaries are so high. The vast majority of people would never do it. Me included, I’m afraid.

How will you afford Prosecco into your 90s?

There are people far more qualified than me around personal finances!
I do think that it’s a worrying gap though, particularly as it seems so complex and it needn’t be. Another gap is around salary transparency.

Take advantage of the 25% off 6 bottles deal in Tesco. Or switch to Cava.

In my experience some people who think they want to retire in their early 40s are actually just suffering from burnout or exhaustion. I did a similar thing to the OP in my early 40s and took time out, but after a year I was actually refreshed and keen to get back to work.

I have really thought about and occasionally struggled with exactly this. The pervasiveness of the economic model we have means this is a necessity, and I landed on if someone can make good on it (and I certainly didn’t make the most) it might as well be me as there wasn’t family money or other sources.

What about helping your husband try to make the business work after years of not making anything?

Interesting - did you go back to the same career or switch?

I think you'll be OK.

It sounds like she knows what she's doing.

That doesn’t sound much to live comfortably on? You can’t draw on your pension for 17 years and £500k only makes about £20k a year in interest so your capital will diminish quite quickly?

What kind of job did you do in finance OP? Was it investment banking? If so, what type of investments did you trade in?

I actually ended up going back to the same sort of thing part time and also took on some work in a completely unrelated field (but something I really enjoy) in my “free time”. So actually I sort of ended up back at 4/5 days a week, although that’s my choice. I got quite bored after a year off and actually realised there were aspects of work I enjoyed and wanted to get back to. I also realised I had been burnt out, but had recovered my energy and felt refreshed (kind of like a pit stop). Also, if you’re in a position to retire then you can be much more picky about what work you choose to do. The pressure comes off and you can find a role you enjoy.

No she hasn’t and tbh given her very high salary and bonus I’m quite surprised she’s not got much more. I would have expected her to have put the full £60k per year into a pension for many years which should’ve produced a much bigger pot.

Am expecting to get £20-25k based on my investments (excluding DH) without touching the principal, and taking advantage of personal allowance will not face much tax on that … Outgoings are pretty modest - no mortgage, house v well insulated so manageable bills, lifestyle pretty basic tbh (mostly home cooking, public transport). We go out quite a lot but get decent deals on cinema, theatre etc. I’ve always been v good at dialing it back if I need to.
My pension is expected to grow to around £8-900k. Expect to get a further chunk from downsizing the house - I’m pretty sure the numbers work (and if they don’t I’ll figure that out).

I didnt spend the entire time in the uk and didnt earn that for the entirety of my career.

I don’t understand how your pension is only £400k after a ~20 year career in investment banking. Did you not try to max it out every year? Also with bonuses of up to £350k, and your claim of being an aggressive saver/investor, how did you only have £500k of investments?

As PP said, based on what you’ve told us, I would expect you to have millions and millions in investments. No hate, I’m just trying to get my head around the maths of it all.

All that aside, congratulations on retirement at 40 - it’s a great achievement.

I worked across FICC in old money - fixed income, credit, commodities. I held various roles in both primary and secondary markets.

Won’t you want to travel now you have the time as that can be expensive?

Yes but I am as happy on a hike around the Lake District!

This is interesting.

I also work in finance and graduated from a RG uni in 2008.

I have had nowhere near the career you have though!

Firstly, I’m not in London, so I guess it’s a whole different ballgame.

Secondly, my degree was not in finance and I jumped about from job to job for quite a while after graduating. Not quite sure how I ended up in finance…

im 43 now and fully qualified in my field, but still feel very much like I am just starting out. I’m still very much lacking in experience. I have been slowed down massively by all the dithering about in different jobs / fields, by having kids (back to back maternity leaves) and now working part time in quite a male dominated industry.

crazy to think of someone younger than me who has completed their career. Fair play to you though. I was clueless in my 20s, I wouldn’t have been able to do what you did.

I had pretty significant outgoings when I was starting out and a much lower salary of course. I also spent too long in just cash investments as I didn’t really have exposure to personal finance (or the time to figure it out). I definitely see I could have been in a better position, but I did the best with what I had and what I knew…

Have you enjoyed your life? Have you had fun whilst doing it?

I am only asking this as I don’t plan to retire for a long while yet, I’m in my 40s. I could possibly have retired if I did the same saving plan as you, but my priorities were very different. I loved uni, my job, going out in my 20s and 30s and having debaucherous
nights out and living the high life in London. I had so much fun and I wouldn’t change a thing. It’s definitely not to everyone’s taste, but I had a blast, made great friends, and was fortunate I met my partner at the right time for me.

Yes, I have no doubt I’ve wasted a lot of money. I met my husband when we were in our early/late 30s and we had a lot of fun and carefree holidays, and now we still prioritise these fun holidays and frivolities with kids rather than save too much (we have some savings).

I think it would be amazing to have the choice you have now, so many things you can do. The possibilities are endless and you don’t have to worry about redundancy at all!! It sounds amazing and I hope you and your partner really make the most of what ever you want to do.

I think the only thing I regret is that I didn’t get to work in Spain when I turned 40, we decided to try for children and it obviously wasn’t compatible with that!